An increase in Japan's sales tax will not be a direct "heavy blow" to Chinese investment in Japan or bilateral trade, Zhang said.

Japan's sales tax rose to 8 percent from 5 percent, the first increase in 17 years and a key part of Prime Minister Shinzo Abe's economic reforms, dubbed "Abenomics". The rate will go to 10 percent starting Oct 1, 2015.

The move is set to hurt private consumption and the Japanese economy is likely to slow significantly in 2014, said a blue book released by the institute on Monday.

Political tensions between the two countries have tightened with Abe's visit in December to the Yasukuni Shrine, which honors Japanese war dead, including 14 Class-A war criminals and a dispute over Japan's nationalization of the Diaoyu Islands that China considers illegal.